A candle-making business is a good bet. According to statistics, nearly 80% of all households in the US use candles.
People have been using candles for more than 5,000 years. Is it time for you to get into candle-making as a business venture?
Why You Should Start a Candle Business
A candle making business is one of those ventures you can start at home, in a spare room or basement. Maybe you’ve made your own candle or two, and wondered if you could make money selling candles.
Here are reasons to join the ranks of candle makers:
You can begin without a lot of capital.
There’s an existing market.
You can make your own schedule.
You’re not limited by geography on places to sell.
The Candle Making Industry
When you’re serious about getting into candle making, joining the National Candle Association is a must for small business candle companies.
Via the NCA, you’ll have access to tons of information, especially tips from expert candle makers. It’s the NCA that does the research on candles – that’s how we know that 80% of US households use candles.
The majority of candle sales – 35% of the annual sales tally – occurs around the holidays. That’s when candles are most likely to be given as gifts and used in holiday decorations.
Candles are sold in three main places: specialty/gift shops, department or home products stores, and via mass merchandisers such as Amazon and Etsy.
The biggest trend in the industry is the shift away from owning your own candle shop. Also, candle making is maintaining its hold as a profitable home-based business.
How Much Does it Cost to Start a Candle Making Business?
The average cost to start a candle business ranges from $9,500 to $78,000, with an average around $44,000. As a small business startup, candle making doesn’t take a huge hit on your personal finances.
The largest chunk of that is in rented or purchased space, such as a place to make the candles and a place to sell them. Rent for such spaces may range from $1,000 to $7,000 monthly, depending on real estate rates in your area.
Other costs include:
Production equipment – $500 to $5,000
Supplies (wax, molds, wicks) – $3,000
Insurance and legal fees – $500 to $3,500.
Permits and licenses for the business – $50 to $700.
Business software – $50 to $500.
Small business insurance – $500 to $2,000.
New business owners usually start small in the candle industry, and would fall on the low end estimate of costs.
How to Start a Candle Making Business
So, you want to sell candles. This step by step guide includes key elements of your business plan template.
We may have favorite types and sizes of candles, but if you’re starting your own candle business, you must consider what your customers want.
Knowing where you can sell candles – your market – is the first step in the candle making process.
1. Decide on the Type of Candles You Want to Make and Sell
The biggest trend in candle purchases is the increasing popularity of outdoor candles, for yard and patio use. That’s a trend worth watching.
Do a lot of thinking about your target market and how you’ll create your niche as part of your marketing strategy and business plan.
Consumers report that their number one reason for choosing a particular candle is its scent. Scented candles dominate the market. In fact, it’s estimated that there are 10,000 different candle scents available.
After scent, consumers choose candles by shape and size.
Here are more types to light your interest:
Soy wax candles
2. Choose Your Business Name
Competition is fierce from the mass produced candle market.
Your homemade candle business needs to stand out from that market. Your business name should define what you’re producing when you’re making candles.
3. Design Your Candles
Tapers? Votives? Pillars? Tealights?
Container? Floating? Liturgical? Outdoor?
Obviously, all those choices already exist in standard form. Your candle making business should be – right, outside the mold.
Here’s your chance to use your imagination and design skills. Also, research various computer software programs that help you design.
4. Decide Where You’ll Sell Your Candles
Candle businesses have lots of options on where to sell. Your location may be a factor. If you’re located in a rural area, for example, your best bet may be online sales.
The number one online marketplace for handmade items is Etsy. You can join and list items for sale there, and also link back to your own website.
You can also market candles on line through websites such as Amazon, ebay and Facebook Marketplace.
Your Own eCommerce Site
You can create your own website as an E Commerce site. To promote your own business this way will require lots of focus on marketing.
As with selling online, a big consideration is packaging and shipping costs. Candles can be heavy and must be carefully packaged if in breakable forms.
Your Own Candle Store
Having your own store, or manufacturing location, can add a lot to your operating costs. You’ll have rent and utility bills. Also, you or an employee must be present during business hours.
Yet if you can locate in a strategic area where shoppers are likely to browse for similar items, it may be a good venture.
Selling Your Candles in Other Stores
Instead of taking your business online, you can try local stores, especially a local craft store. If you can get in at one of those stores, your candles will be displayed amongst other handmade items. Local craft stores attract consumers who are seeking handmade, unique items.
Gift shops can also be good places to sell your candles. Remember, shoppers are looking for gifts and 35% of candles are sold as gifts during the holiday season.
Retail stores can also be lucrative places to sell your candles, but it is typically more difficult to get shelf space there. A local grocery store can be an option, as last-minute gifts are often places near the checkout area.
Local Craft Shows
People go to local craft fairs and shows to find unique gifts. Many candle makers have great success getting started this way.
Provide a bag and a business card with information about your small business, and you’ll be selling and marketing at the same time. And that’s a sure way to develop repeat customers.
What about flea markets? Maybe. But often shoppers are focusing on finding a bargain instead of a unique product. Still, flea markets are marketing opportunities and a place to meet potential customers.
5. Write a Business Plan
Successful businesses have a strong business plan. Your plan should include your objectives and strategies to address your handmade business ideas.
Before you write your business plan, you should have your initial candle line fleshed out. Your product line is a key part of your business structure because it defines the equipment you’ll need when starting a candle business.
You’ll also need to outline your planned business finances. That should include the capital you’ll need to get started with your initial product line and the capital you’ll need as the business grows.
6. Find a Manufacturing Space
If you’re lucky, the manufacturing space might be your basement. You’ll have to check local zoning laws to make sure you’re clear to run a home-based business. Since starting a candle making business has little or no impact on neighbors.
The candles include flammable materials – the wicks – so you’ll need to check zoning laws to make sure that is allowed.
7. Set Up Your Work Space Correctly
You’ll be working with melted candle wax and it’s important to set up your work space so there’s a flow.
The wax is heated in metal kettles, and filtered before perfumes, fragrance oils and/or dyes are added.
The melted wax is cooled and poured into a molding table, which is positioned above molds. That’s the process when you have “continuous” molding machines and make candles in groups. You can also pour each mold manually and individually.
The molds should be preheated so that the wax flows evenly into them.
After the molds are filled, the jacket around the molds should be filled with cold water.
8. Set Up Your Business Legally
Making candles is the fun, creative part, but you can’t slack up on the paperwork.
One of the most important things to do is to follow the National Candle Association advice and include a fire safety cautionary label. The label lists three rules: Burn within sight, Keep away from things that catch fire and Keep away from children.
A business entity is also a legal entity, and your attorney is going to want the fire safety cautionary label.
According to market research, the majority of people starting a candle making business opt to form a limited liability company (llc). That’s because if anything happens when people use your product – a fire is started or someone has an adverse reaction to a scent – your personal assets are protected.
Insurance, Permits and Business Licenses
You’ll need business insurance and product liability insurance. Anyone creating a product needs product liability insurance – even if you’re set up as an llc. It’s another layer of protection for you if your product creates physical harm or damages to someone else.
If your home is your business location, you may need to add a special rider to your existing home owners policy. If your business location is separate from your home, you need commercial property insurance.
Business Bank Account
You’ll need to set up a bank account specifically for your business. That’s the easiest way to track expenses, profit and loss. It’s also a necessity when tax time comes.
9. Research Funding for Small Businesses
When you research funding for business ideas, you can’t beat the Small Business Association (SBA). They have experts who can steer you to the best avenues for funding and possibly even grants (women owned businesses, for example).
Here are other funding ideas from the SBA:
Business Credit Cards – Unsecured revolving lines of credit in the form of business credit cards. Not only can it help keep your personal and business expenses separate, it can build your business credit file, provide access to cash and credit, and offers flexible payment options.
Microloans – A microloan is easier and faster to get than a traditional business loan. Amounts are usually under $50k and used for many purposes including the purchase of equipment, inventory, supplies, and working capital. The SBA works with designated intermediary lenders across the country.
Crowdfunding – One of the fastest ways to cast a big net for attracting investors to a business is through crowdfunding.
Credit from Vendors – Vendor credit is the largest source of capital from business-to-business and remains the number-one alternative to personal and small business loans. As startup, you can gain access to short term financing from vendors with minimal requirements. It is an invaluable solution that provides a business with the ability to purchase products and services it needs upfront while allowing the business to defer payments for a later date (net 30 accounts).
Personal Business Loan – Securing a traditional business loan can be a time-consuming process and uphill battle especially for a startup. In real world examples, only 34% of small businesses received traditional funding through their bank, compared to 75% of larger businesses.
10. Source all Your Equipment
You’ll need the equipment to make the candles: Wax melting pots, containers (tins and jars), molds, packaging supplies, measuring instruments (such as thermometers and scales).
You’ll need supplies: wax (paraffin, beeswax, palm wax), wicks, dyes and fragrancing. Reliable relationship with suppliers is important.
You’ll need to have a marketing plan in place.
11. Hire Employees
One of the business ideas for candle making is to start by making the candles yourself, without employees.
Instead of hiring employees for making the candles, consider hiring a professional marketer. As the marketer helps you build your business, then add the employees. Again, you may add “outside” employees such as delivery people and merchandizers as part-timers.
You’ll need an Employer Identification Number if you’re a sole proprietor.
12. Market Your Business
If you opt to do your own marketing campaigns, social media platforms offer a place to start. You’ll link to your website, where you’ve introduced the business by having a “brand story” relating how and why you got started.
If you go to local craft shows, make sure to trap leads and convert them to new business.
Remember that 35% of candle sales occur during the holiday season, so focus on having plenty of inventory and selling opportunities during that time.
13. Drive Candle Sales and Enjoy Having a Successful Business
Here’s one of the best tips for a business owner in our step by step guide for your candle making business:
Get names and contact information for club advisors and sports team booster at your area schools. Get involved with their fundraisers by offering your candles at a discount. Maybe you’ll supply candles made into school mugs, for example.
You’ll box the candles individually, and include a business card. Note on your website that you participate in fundraisers.
How do I make my candle making business successful?
Know your target market. Somewhere in the mass market for candles, you’ll define your niche.
Have a prepared pitch that you’ll use when you branch into new markets.
Brainstorm with friends and family to come up with a great brand name that helps create your identity.
Start with a small product line.
Carefully choose where to sell.
Is the candle making business profitable?
Once the basic supplies such as melting pots and molds are purchased, the other supplies aren’t expensive. In other words, there’s a good profit margin for candles.
Keep costs stable early by limiting your product line, such as choosing a certain number of frangrances and types of molds. Try to limit your shipping and delivery costs.
How much money can you make from a candle business?
According to statistics, at the entry level – small product line start up – an entrepreneur should clear $22,000 at a minimum. The range for new candle making businesses is from $22,000 to $34,000.
Those are the stats for a sole proprietor. Obviously your expenses will be higher if you opt to have a brick and mortar store or manufacturing center, and hire employees.
Is candle making a good home business?
It’s a great home business. There are low start up costs and the setup doesn’t take up much room.
Do I need insurance for selling candles?
Use the National Candle Association cautionary fire safety label.
If you opt to form an LLC (which you can do even if you’re a sole proprietor), your personal assets will be protected.
You’ll need product liability insurance. The product liability insurance will protect you against claims against products that you manufacture, sell and provide. It can also cover any costs for your legal defense against claims.
Where can I sell homemade candles?
You can sell homemade candles online via established marketplaces such as Etsy, Amazon, ebay and Facebook Marketplace.
You can sell in stores, such as craft stores, stores that sell decorative items for homes, and even grocery stores.
You can sell via your own e commerce website.
You can rent a booth and sell at local craft fairs and other community events.