How to Start a Candle Making Business | Growthink

How to Start a Candle Making Business

how to sell homemade candles

 
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When you think about starting a new business, the focus is usually on making money. However, there are many other benefits to running your own business, from keeping up with the latest trends and innovating yourself to being your own boss. One lucrative yet overlooked industry is candle-making.

In this article, we will share with you how to make your candle business a success.

Importantly, a critical step in starting a candle making business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.

Steps to Starting a Candle Business

1) Determine your niche.

There are many ways to go about creating your own candle business. The first thing you need to do is decide what your specific niche will be. Do you want to focus on making candles for an event? Or how about customizing candles for the home? Do you want to sell candles for a particular type of holiday such as Christmas or Valentine’s Day? You can even create multiple niches and focus on giving customers what they want.

2) Name and register your business.

You will need an official business name and you will have to register your business with your state and the federal government. You can pick a name that is related to candles and/or has something to do with your intended market (e.g., Glitter and Sprinkles if you’re selling at craft fairs, Secret Garden for weddings).

3) Determine your business structure.

You have a few options when it comes to setting up your candle business.

You could sell as a sole proprietor, meaning you are responsible for all debts and actions of the company.

A partnership is where two or more people decide to pool resources together with each party being responsible for their actions.

Other common business structures include a limited liability company (LLC) and a corporation. When you choose your business structure, make sure to review any paperwork.

The best option for you depends on your personal preference and the size/type of business you want to start.

4) Create your candle-making business plan.

Create a business plan that includes your budget, materials list (including costs), and marketing strategy. You will need to decide what kind of candles you want to make, how much you will charge for them, and how many hours you are willing to spend per week making the initial product line.

5) Determine how you’re going to finance your candle-making business.

Figure out what kind of capital is necessary and how you are going to get it. Your best bet may be a line of credit from the bank, business credit cards, or getting a small business loan.

6) Open a business bank account.

This is the official account you will use for your business. It helps to separate your personal and business expenses, but it can be confusing at first since money may still come from different sources. For this reason, you must be organized when it comes to keeping track of income and expenses.

7) Set up bookkeeping software for your candle business.

You are going to need some method of bookkeeping that allows you to keep track of your income, expenses, and taxes. You can use a simple Excel spreadsheet if necessary but purchasing accounting software will make the process much easier. When you set it up, don’t forget to set up separate accounts for all of your different kinds of expenses, income, and taxes.

8) Purchase insurance.

As with any kind of business, it is advised that you get insurance before getting started. This way, if something happens to your equipment, you are not left footing the bill. Also, talk to your insurance agent about covering liabilities that may arise from customers who are hurt while visiting your candle-making lab or store.

9) Find the right equipment.

This will be largely dependent on what type of candle-making business you want to start. A few suggestions are: melting pots, stirring spoons, measuring cups and spoons, molds (silicone or wooden), and thermometers.

You can find most of these items at a local craft store or online candle-making suppliers.

10) Source your supplies.

You will need to find out where to buy wax (soy wax is best), wicks, dye, and fragrance. There are pre-made kits you can buy with everything you need to make candles. Otherwise, you can buy the supplies separately if you are more familiar with the specific supplies that you want to use in your candles.

11) Set up a “candle lab.”

To make wax candles, you will need to devote some space for melting wax, mixing colors, pouring into molds, and cooling.
Once you have all your materials and licensing, it is time to start making candles! Here are some tips:

  • always work in a well-ventilated area
  • work with one color of wax at a time
  • melt the wax to between 130-140 degrees Fahrenheit
  • let the dye dissolve completely in the hot wax before stirring (otherwise, your colors will be muddled)
  • use good quality fragrances
  • wear clothes that cover your skin, closed-toed shoes, and a hair net if you have long hair

If you are just starting, you can use your kitchen or basement. If the work becomes too consuming, then an entire room may be necessary.

12) Test your product and chemistry knowledge.

Before you begin to produce large quantities of candles, make a small batch and test them for scent throw (how well it smells), hot and cold scent throw (making candles is all about chemistry), cooling effect (if you used dye, your candles may heat up and melt the dye which will look bad), wax melt pool (how big it is), how long it burns, etc.

13) Create a marketing plan.

Research your target market and determine how to reach them. You can start by hosting small events in your home with friends and family for feedback, then slowly expand from there. Gain more exposure by signing up for a booth at local trade shows and craft fairs where you can sell your candles.

If you want to sell and ship your candles across the country, you can also begin building your own website with the help of a friend or family member who has some web development experience or choose an easy drag and drop e-commerce platform to help you get started.

14) Enjoy the sweet smell of success of your own candle business.

Once you have mastered the art of making candles, you can begin selling candles locally and online using marketplaces like Etsy or build your own website to attract more potential customers.

With hard work and dedication, your business should soon be booming.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your business plan and financial model in hours.

How Big is the Candle Manufacturing Industry?

The candle manufacturing industry has shown quite an increase in popularity over the last couple of years. The market size now exceeds $2 billion and is projected to grow to $6.6 billion in the next 5 years.

candle industry infographic

What are the Key Segments of the Candle Manufacturing Industry?

Candle manufacturing is a very fragmented business with a majority of it being small and medium-sized companies. There are only a few large manufacturers who hold a significant market share.

The largest segment in the industry is container candles, accounting for 58.7% of the market. The second biggest segment is votive candles, accounting for 21.7% of the market. Other segments include pillars, tapers, novelty candles, and others.

 

What External Factors Affect the Candle Manufacturing Industry?

The following external factors also play a role in the candle manufacturing industry:

Disposable Income – Key influencer of the industry. As disposable income increases, so does consumer spending on candles.

Consumer Preferences – Shifts in consumer preferences have a large impact on this industry as it is heavily driven by aesthetics. With new fashions and trends emerging regularly, an additional challenge for candle manufacturers is to keep up with consumers’ tastes and preferences.

Production & Materials Cost – Key influencer of the industry. Changes in resin and wax prices will affect the cost of producing candles.

Environmental Regulations – The environmental impact of burning candles is becoming a major issue for this industry, with consumers increasingly concerned about pollution and its long-term effects. Rising awareness could lead to regulation in this area and introduce an obstacle to candle manufacturing companies’ growth prospects.

 

Who are the Key Competitors in the Candle Manufacturing Industry?

The candle manufacturing industry is fairly fragmented with several small to mid-size companies competing for a share of the market. The following are some of the key competitors in this industry:

  • Private Label – Candles are frequently sold under the brand names of retailers or distributors.
  • SC Johnson and Sons – Manufacturer of Glade candle products along with a wide range of other products.
  • The Yankee Candle Co. Inc. – The company manufactures and retails candles, holders, related accessories and room sprays through its candle wholesale division.
  • MVP Group International Inc. – The company designs and manufactures various private label and branded candles, candle accessories, home fragrance products, and decorative accessory gift products.
  • Newell Brands – The candle making company produces the Duraflame brand of candles.

 

What are the Key Customer Segments in the Candle Manufacturing Market?

The key customer segments in this market include:

  • Home furnishing stores – These are retailers who sell candles, candle holders and other home furnishing products.
  • Mass merchandisers – Retailers who operate large retail outlets where they sell a general line of products and whose main target market is the price-conscious consumer.
  • Small specialty retail stores – These are retailers who sell a limited line of products and whose stores may be arranged similarly to those of home furnishing retail outlets.
  • Wholesalers – These are intermediaries who purchase products from the manufacturer to resell them to retailers.
  • Exports – Export sales make up a significant percentage of annual candle sales and is expected to grow in the future.
  • Direct sales – Candle sales are made directly to the consumer by manufacturers and producers.
  • Online sales – Candle sales are made through their own ecommerce site and other online marketplaces.
If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your business plan and financial model in hours.

What are the Typical Startup Costs for a New Candle Making Business?

The typical startup costs for a new candle business can range anywhere from $10,000 to $80,000. New candle businesses will require the following initial investments:

  • Raw Materials – Raw materials needed to produce candles may include wax, glass containers, scents, wicks, and other related products.
  • Production Equipment – Production equipment may include molds, melting pots, and filling machines.
  • Marketing Expenses – Marketing expenses may include costs related to promotional items, industry publications, and related products used for marketing purposes.
  • Advertising – Costs of advertising for a new candle business will depend on the type of media used but are expected to be upwards of $1,000 per month.
  • Office Supplies – Office supplies needed by a new candle company might include stationery, business cards, labels, and other related products.
  • Legal Fees – Costs of legal fees may be incurred to file all necessary legal documents.
  • Business Licenses and Permits – Costs of licenses and permits will depend on the location of the new company but are expected to be under $1,000.
  • Packaging and Shipping – Packaging and shipping costs will vary depending on the type of products sold but are expected to be upwards of $1,000 per month.

As your business grows, you may find there are some additional costs of obtaining a larger space:

  • Renting a Commercial Space – The rent for a commercial space will depend on the location of the business and could cost between $1,000 to $3,000 per month.
  • Employee Costs – The employee costs for a new candle-making business will depend on the type of workers hired but are expected to be upwards of $1,000 per month.
  • Utility Costs – Utility costs for a new candle-making business may include electricity, gas, and water.
  • Business Insurance Costs – Insurance for a new candle company may include general liability insurance, commercial property insurance, and vehicle insurance.

 

Is a Candle Making Business Profitable?

Like most businesses, one of the keys to running an effective candle making company is generating positive cash flow on a regular basis. A successful candle business should be profitable enough to support your family and also allow you to invest back into it so that you can grow the business over time.

 

What are the Keys to Launching a New Candle Making Business?

If you’re looking to start a candle business, there are a few key things you need to know. Here are the most important:

1. Make a business plan.

This will help you map out your goals and strategies for your business. A candle-making business plan should cover a variety of areas, including candle manufacturing, market analysis, key competitors, marketing plan, financial plan, and more.

2. Find customers.

Before you start making candles, find out how much demand there is for the products or services that you will offer. If you can’t find enough customers, then your business won’t succeed.

3. Get funding from the bank or investors.

In most cases, you will need to secure a loan from a bank or obtain significant financial backing from an investor to successfully start a candle business. In some instances, you might also receive low-interest loans or grants from the federal government if your candle business is located in an economically disadvantaged area and/or offers products that benefit society as a whole.

4. Market your candle-making business.

Make sure people learn about your new candle-making company. Create your website, market on social media platforms like Facebook & Twitter, sell through online retail stores such as Amazon & eBay, and do whatever it takes to get the word out there that you’ve started a new candle-making company.

5. Never stop improving.

In the beginning stages of running a candle-making company, you should never stop learning about how companies make money or new marketing strategies that can help grow your customer base. One of the most common mistakes made by small businesses is not staying up-to-date with industry trends and new developments within their field.

 

How to Finish Your Ultimate Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your candle making business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your candle making business plan today.

 

How to Start a Candle Making Business FAQs

Several costs will be associated with starting a new candle-making business, including production equipment, raw materials, and employee wages. However, many of these expenses can be offset by working with suppliers and manufacturers that offer discounts on the resources needed to produce candles or other related products for sale.

While there is some risk due to the industry's sensitivity to consumer tastes and preferences, this market presents several opportunities for new entrants or companies that can provide unique products at reasonable prices:

Increasing Awareness About Scented Candles - The candle manufacturing industry has been receiving a lot of attention from the media lately, giving many people the opportunity to know more about how scented candles can affect their lives. Candles have been shown to lift consumer moods and reduce stress levels, which could represent future growth opportunities for this industry.

Expansion in the Casual Segment - While candles have been traditionally associated with holidays and events, more companies are beginning to recognize candles' usefulness in everyday life. This presents room for growth, especially when it comes to casual candles, which seem to be mostly overlooked by consumers at present.

International Potential - Market opportunities exist in countries that have a high demand for candles and where candle manufacturing companies can benefit from affluent consumers with high disposable income.

Using social media marketing websites is a great way to market your candle business. Facebook, Twitter, Pinterest, and Instagram are just a few social media sites that you can use to tell people about your products. Post pictures of the candles you have made, and offer coupons or giveaways for future candle customers.


 

Helpful Videos

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STEP BY STEP: How I Make My Soy Candles For My Business


 

Candle tips, getting into stores


 

Additional Resources

CandleScience – Learn How to Make Candles

National Candle Association

Candle Making Supplies List for Beginners
 

Other Helpful Business Plan Articles & Templates