How to Start a Candle Making Business at Home

Do you want to start a candle making business at home? If YES, here is a complete guide to starting a candle making business with NO money and no experience.

People don’t just purchase candles as gifts, but to decorate and change the fragrance of their homes and places of business. Today, independent candle businesses are able to compete with established companies because consumers typically look at the quality and performances of a candle when making purchases, rather than the name attached to the candle.

If you’re thinking of starting a candle business, you can do several things to grow your venture into a success like learning how to make candles by taking an online or in-person class, reading candle making books or tutorials, writing a candle making business plan.

Books on candle making may be available at your local library, and many free print and video tutorials are on the Internet. If you think you may want to look into this type of business, then you can begin to take seriously all the information that you find around you. Here is a comprehensive guide on how you can start a candle making business;

Steps to Starting a Candle Making Business at Home

1. Understand the Industry

Candle manufacturing is a multi-billion dollar industry, so it’s fair to say it’s big. Compared to other industries, however, such as petroleum, automobiles or computers, candles rank as a rather puny sector. Whether an industry is big or small, there are several ways to measure its size.

Interesting Statistics About the Industry

Many of the companies involved in candle production are privately held, making a true snapshot of market capitalization of the industry impossible. Private corporations include two of the biggest players — SC Johnson & Sons and Yankee Candle.

However, Procter & Gamble Co., a publicly traded company and manufacturer of many home-based products including candles, is valued at more than $200 billion.

Candle sales took off in the 1990s, when they became a part of home decor and peaked in 2000, growing at a rate of 10 percent or more each year. Consumer demand for home fragrance products helped feed this tremendous boom. Sales remained flat during the 2000s due in part to the recession, but there are signs that sales are about to reignite.

The market for luxury candles is sparking overall growth of the home fragrances market. While candles come in all types of shapes and sizes, scent is the reason for new growth. Social media is helping drive the home fragrance candle market, creating a surge in Internet sales.

Candle sales in the U.S. are estimated at roughly $2.3 billion a year, but this does not include accessories such as candlestick holders.

For comparison, the U.S. computer industry has annual revenues of about $86 billion, again making the candle industry appear small in scale. Candles are a highly discretionary purchase and sales are greatly influenced by economic climate.

Roughly one-third of all candle sales take place during the holiday season. There are more than 400 candle manufacturing companies in the united states, and scores of craft producers who make candles for local or non-commercial use. The candle industry employs more than 7,000 workers in manufacturing, distribution and sales.

For comparison purposes, there are 43,000 clergy and 25,000 carpet installers in the United States. The retail price of a candle can range from 50 cents for a votive to $200 or more for a distinctive artisan candle. There are as many as 2,000 varieties of candles and 10,000 scents available.

More than a billion pounds of wax are used to make the candles sold in American stores every year. Paraffin is the most commonly used candle wax today, along with beeswax, soy wax, palm wax and blended waxes.

Over the past five years, improving incomes and the introduction of a variety of scented and coloured candles has helped the industry recover from lows incurred during the recession. Going forward, the Candle Making industry is expected to continue benefiting from growing demand for candles domestically and abroad.

In turn, this will be underpinned by rising disposable spending and a sustained preference for candles as scented and coloured additives to rooms and households. Still, the industry is expected to continue dealing with challenges such as competitive substitutes (e.g. flowers), low-price imported candles and high-plastic input costs.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

Those who require the use of candles include homes, churches, as well as interior decorators, amongst others.

3. Decide Which Niche to Concentrate On

Once you have decided the material to be used for your candle production, you can go on to make gel candles, aromatherapy or container candles. If you are inclined, maybe you want to experiment with confectionery candles, a special genre of candles that reproduce the look and smell of popular food items.

Through moulding process, there is no limit on how you want to shape your candles. Alternatively, you could decorate your candles to add visual impact; you can use anything from flowers to paint. The type of candle you choose to make or manufacture would be your own specific niche.

• Manufacturing container-filled candles
• Manufacturing pillar candles
• Manufacturing votive candles
• Manufacturing taper candles
• Manufacturing tea light candles
• Manufacturing floating candles
• Manufacturing gel candles

The Level of Competition in the Industry

The candle business is big business, make no mistake about it. The candle industry uses 1 billion tons of wax to manufacture candles in the U.S. each year. The industry itself grows at about 10% per year and Candle sales in the United States each year are over $2.3 billion.

The biggest sector in the candle industry is with companies who offer natural or alternative waxes. People are becoming more conscious of health concerns and are becoming greener. The 4 most important factors affecting candle sales are scent, colour, cost and shape.

Candles are no longer what they used to be. In the good old days, candles were used only as tools for illumination. Today, with the advent of electricity, candles are not considered as essentials anymore.

But despite that, candles are still popular and people still buy candles; especially in countries that still experience power failure or places with absence of electricity. The popularity of specialty candles has really taken off in the past decade as more and more people are starting to enjoy the relaxing effect that burning scented candles can have.

4. Know Your Major Competitors in the Industry

• Yankee Candle
• Colonial Candle
• White barn candles
• Virginia Candle / Wood Wick Candles
• Bridge water candle
• Slatkin & Co
• Gold Canyon Candles
• Village Candles
• Circle E Candles
• Better homes and gardens

Economic Analysis

The U.S. candles market has struggled in the past few years’ right from the onset of the recession, but has started to show signs of recovery. In 2013, total U.S. retail sales for candle products are $3.14 billion and the market posted a 0.3% sales increase during 2012-13, the first positive growth experienced in several years.

Consumer confidence in the economy is increasing and consumers are slowly starting to spend on discretionary household items again, and it is expected that the category will experience flat sales into 2018, with some small increases and declines over the upcoming five-year period.

When starting your candle making business, you should focus on product development and marketing efforts on consumer groups who are heavily engaged with the category and view candles as a lifestyle product, which includes younger age segments and multi-ethnic consumer segments.

Another strong opportunity for the market is promoting candle usage beyond just for eliminating odours and adding seasonal ambiance. Encouraging the use of candles for more spontaneous, personal occasions when in the home could influence people to use their candles more often and subsequently make more frequent candle purchases.

5. Decide Whether to Buy a Franchise or Start from Scratch

Candle Making franchises provide an excellent opportunity for turning your creativity into a profitable business more than what you can achieve if you start from the scratch. As with any new business start up, franchise opportunities have their pros and cons.

If you have a creative streak coupled with an entrepreneurial spirit, then opening a candle making franchises may be an option worth considering. There are plenty of franchising opportunities available, from scented candles to special ceremonious candles. With so many options available, chances are you can find something that fits perfectly with your favourite business.

Opening a franchise involves a significant investment. While the initial expense may range from a thousand to a few hundred thousand dollars, many people find that the investment is worthwhile. Many candle making franchises offer name brand recognition that can be very challenging to obtain on your own as a home grown business.

Choosing to go the franchising route does have its benefits. Having a turnkey system to work with eliminates the need for costly trial and error. For those without a business management background, a franchise can provide not only the supplies you need to get started, but also the training you need to handle the business end of the franchise.

6. Know the Possible Threats and Challenges You Will Face

Owning a candle-making company can be exciting because you are passionate about candles. You like the fact that you can take dozens of scents and make unique creations. You then sell these creations to make the homes of people smell great. Candles also have a decorative element to them as well. Here are few threats you might face when starting your Candle making business.

• Learning how to make candles or about candles
• Deciding on the type of candle you would be making
• Doing your feasibility research
• Choosing your work area
• Registering your business
• Choosing a price model
• Simplifying your marketing plans

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

You have two legal entities available when trying to open a candle making business – sole proprietorship and the LLC. To understand the tax liabilities for each, it is important to understand the definition of the terms. A sole proprietor business structure is, as the name suggests, a company with a single owner.

This structure is used by three-quarters of all businesses. It keeps the owner in control of the company and has the simplest initial setup. A limited liability corporation, or LLC, is often formed for partnerships when the business has grown significantly.

The advantage of an LLC is more options for growth and tax advantages. Many people would rather create an LLC than a sole proprietorship because of liability issues, but that takes money to prepare the articles of incorporation.  Payment options need to be considered, a bookkeeping system has to be in place, and this all takes additional money that takes away from the funding necessary to purchase the materials to make the products.

8. Choose a Catchy Business Name

• Bright Candle
• Lights Candle
• Candles People
• Top Candle
• Light It

9. Discuss with an Agent to Know the Best Insurance Policies for You

Business insurance will protect you against any lawsuits that may come your way. You never know when someone may come about and say that your candle burned down their home due to a safety issue. Although this is rare, it never hurts to have business insurance to protect you. Insurance covers to consider are:

• Public and Products Liability
• Stock and Contents for Fire, Burglary and Business Interruption.
• Professional Indemnity (if advice is given for a fee)

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

Intellectual Property in the United States has become increasingly more important in the last decade. The right to own one’s genius is not a new concept. However, with the arrival of the digital age, it has become much harder to remain in control of one’s intellectual property.

Intellectual property has grown from the need to protect one’s new invention, such as soap, to the need to protect a slogan or a colour. In other words, intellectual property rights no longer protect solely the interest of preserving a trade secret.

11. Get the Necessary Professional Certification

Education is helpful, but candle makers are trained primarily on the job, where they learn skills from experienced workers or from a manual. Beginning candle makers start from basic tasks, such as waxing and pouring. As they gain experience, they make more candles and adding their own innovation because they are no known certification for candle makers but just few Associations.

Knowledge is very important because it can be a huge determinant between your cost of production and your profits. The first place to start your research is on the internet because there are many candle making forums where seasoned candle makers are willing to assist you.

All you have to do is to gather as much information as you can, but ensure that the information gathered is aligned with your aims and objectives.

If your aim and objective is to make soy candles and tarts, do not explore paraffin alternatives. Experiment with different candle making techniques and perfect the technique you think work best. You will be able to earn more if you master your craft. Practice makes perfect.

12. Get the Necessary Legal Documents You Need to Operate

Everyone knows that before you can start your candle making business from home, you need to get the appropriate permits and licenses from both your state and local government. You don’t want the government closing you down for illegal business operations.

Before you start your candle making business from home, speak to an attorney or an accountant. Get advice on tax structures and insurance. You will need it for future purposes.

13. Write a Business Plan

A well written business plan is just as important for an established business, whether small or big, as it is for a start up. Just like no two businesses are alike, so also are business plans; some aspects of a plan will be more relevant to some businesses than to others.

So, it is very important to tailor the contents of a business plan to suit individual circumstances. Nonetheless, most business plans follow a well-tried and tested structure, and general advice on preparing a business plan is universally applicable. A good business plan should have the following features;

• It should help you clarify, focus, and research the prospects of your proposed candle making business or expansion idea.
• It should provide a considered and logical framework within which your business can develop and pursue business strategies over the next few years.
• It should be able to offer a benchmark against which you can measure and review the actual performance of your business.
• It should serve as the basis for discussion with third parties such as creditors, investors, shareholders, agencies, etc.

14. Prepare a Detailed Cost Analysis

Founding and operating a candle making business makes you both an artisan and an entrepreneur. Most people buy candles at one point or another, making them a great product for you to create and sell. To start a business, you first need to learn the appropriate skills for candle making.

You also need to make your business legal and figure out where you are going to sell your candles to the public. You can start your candle making business at your home. Clear a space in your home, whether in your garage or even your own craft room, where you can create your candles. Candle making is a messy craft and your space must be easy to clean and handle.

• Candle making classes or eBooks- $300
• Candle making Equipment (Double boiler, Wax, Wicks, Moulds, Dyes) – $1200
• Legal aspect (EIN, insurance etc.) – $2000
• Bank account – $100
• Miscellaneous – $500

From our detailed cost analysis, you will need $4,100 to start a home based candle making business and $18,963 to start a medium size candle making business.

15. Raise the Needed Startup Capital

Candles are a very popular home décor and gift item, and many independent candle businesses start up each year. Whether you are a candle artisan or wholesale distributor, selling candles can be enjoyable and quite profitable year-round, especially during holiday and major gift-giving seasons.

Before opening a candle business, there are many things you should consider to ensure your venture is a success like how to finance your business. You can finance your candle making business through many ways.

• Personal savings
• Pitching
• Bank overdraft
• Crowdfunding
• angel investor
• Partnership

16. Choose a Suitable Location for your Business

Candles can be sold in a variety of different places, and which venue you choose mainly depends on how much money you have to start your candle company. The cheapest candle selling venues include flea markets, e-commerce stores, online auction websites, online artisan marketplaces and craft shows.

Mall kiosks, stores and booths, and brick and mortar stores are the most expensive places to sell candles; most companies start with a smaller venue, wait until their candle company is established and then branch out into a traditional store.

It is a good idea to sell your candles though different venues to ensure that you are generating a steady income. Like many products, the type of candles that sell well are often determined by trends. Fragrance trends are important to watch when selling candles–this is often seasonal.

For example, pumpkin, pomegranate, cranberry, peppermint and balsam scents do well in fall and winter, whereas bright floral, fresh fruit and citrus cents are very popular in spring and summer months. Joining a candle business association or subscribing to a candle industry publication will help you stay abreast of upcoming scent and colour trends to maximize your profits.

17. Hire Employees for your Technical and Manpower Needs

The main item being sold in a candle business is of course candles, but you will need to decide just what type to sell. For instance, you may want to sell soy, votive, tea light, hurricane, wickless, gel, pillar, jar, novelty or scented candles.

You also need to determine whether you will make your own candles or purchase them wholesale. Though buying candles wholesale is easier, making your own line of candles will differentiate your business from other candle companies.

In addition, you should consider selling candle accessories, such as plates, warmers, wick trimmers and holders to add additional revenue to your business. Remember to get instructions for the type of candle wax you are using. Different candle waxes (soy wax, paraffin wax, etc.) have different pouring instructions.

Items needed for a Candle making business may include:

• Presto Kettle (deep fryer with thermostat)

This is used for melting your unscented candle wax. You need a kettle with a thermostat to avoid overheating. These can usually be found at Wal-Mart for around $20.

• Thermometer

A thermometer is very important in candle making. Different candle waxes require different heating and pouring temperatures for them to burn properly.

Pouring Pot

The pouring pot is used to mix your candle fragrance oil and candle dye with your melted candle wax. You will dip the amount of melted candle wax you need from the Presto Kettle into the pouring pot, adding candle scent and candle dye, then pour into your container or mould (depending on the type candle you are making)

• Digital Scales

Digital scales are one of the most important candle making supply items you will need to make your candles correctly. It is very important to always weigh your candle wax and candle fragrance oil on a scale rather than measuring in tablespoons or cups.

Always measure by weight, not volume! Because different candle fragrance oils are heavier than others (gravity weight), you do not always get the accurate amount unless you use scales. You can use digital postal scales from Wal-Mart. However, do not use the balance scales you use to weigh food on, they are not as accurate. Other items you will need

• Wooden spoons for stirring
• Dixie Cups for weighing candle making fragrance oils
• If making container candles, you will also need hot glue or silicone for gluing candle wick in jars or candle wick stickers, which we sell.
• Then, of course, you will need candle wax, candle fragrance oil, candle wicks and candle dye.

Testing is a very important part of becoming a candle maker. It is not wise to make candles for the first time and then put them out to sell.

There are many things to learn before you will be ready for marketing your candles. First, you need to test your candle wax in your containers with different candle wicks to find which one provides the best burn. You would not want to sell a candle that did not burn correctly.

The Service Delivery Process of the Business

The manufacturing of candles consists of three steps: preparation of the wicking, preparation of the wax base, and continuous moulding or extrusion of the finished candles.

• Making the wick
• Preparing the wax base
• Moulding the candle
• Extrusion

18. Write a Marketing Plan Packed with ideas & Strategies

Starting any news business is hard. There are a million things to think about all of which are essential to your success. Something that should be given a lot of thought is marketing your candle business. There is nothing wrong with ambition.

Ambition will drive you to business success but being overly ambitious will be detrimental to your business. Start small. You have just begun your candle making business from home. Don’t attempt to go global when you are only capable of producing a small amount of candles. It will only lead to frustration and eventually, you will give up.

• Create an online presence
• Take it to the streets
• Free samples
• Become a regular at your local markets
• Home parties
• Fundraisers
• Build a great website

19. Work Out a Reasonable Pricing for your Services & Products

The first step to setting prices for your candles is to figure out your cost on the product.  Do this by figuring out the cost per ounce of your wax and any additives such as colour, scent, stearic acid, vybar, petro, etc. Once you have your cost per ounce, figure the number of ounces in a particular candle you make and multiply that by your cost per ounce.

If the candle is in a container, add the cost of the container to that figure.  Also try to add in at least an approximate cost of your wick and packaging.  This should give you the total cost of the candle. A general rule of thumb is to mark up your total cost 3 or 4 times for retail, and 2 times for wholesale. This will vary in some cases.

Sometimes you may be able to mark your price up higher than that, and sometimes you may need to lower it. Buying your supplies in bulk and at wholesale prices will help you to keep your costs down and enable you to make a good profit.

Remember to take into account the time you spend getting your supplies, producing the candles, packaging them, shipping or delivering and selling them. You need to make enough of a profit to make all of your invested time worthwhile.

20. Develop Iron-clad Competitive Strategies to Help You Win

One of the most interesting facts in the candle making industry has always been the ability for a candle company to compete in certain markets, regardless of size, scale and capital. Even the smallest candle maker has the ability and opportunity to succeed because of their personal attention, potential for offering a wide range of fragrances and colours, and their ability to react to small orders in a rapid manner.

When starting out it would be best to service local accounts such as your small gift store, family-owned pharmacies, furniture stores and even consignment shops.

You may want to look at local craft and art shows. This is always a good starting point to build local interest in your products. It also provides a good forum to find what your potential customer may desire. A well-designed web site is always a good idea too.

However, keep in mind that many candle companies have their own web site, thus it is hard to get your product in the forefront. While eBay does not really need an endorsement, many candle companies find this to be a very successful place when starting out.

Listing costs are very low and many potential customers can view your products. One critical element is not to overextend yourself or take on orders that are well beyond your production capability.

While it is always very appealing to have your product accepted into mass retailers, it can hurt a growing or small company. In many instances it is very difficult for smaller companies to have the same purchasing power as the larger ones when purchasing the waxes, scents and colours.

In summary, in other to win competitors in the industry you need to go from grassroots to the big names. Humour local businesses and curtail your material cost to avoid undue expenses.

21. Brainstorm Possible Ways to Retain Clients & Customers

The popularity and consumer demand for scented and decorative candles creates a tremendous business opportunity for the innovative start up which even you without a degree cam start. To start a candle making business, there are many things you should consider to ensure your venture is success, which includes how to retain your customers.

• Let your creativity sell you
• Stay safe and legal
• Choose suitable vendors
• Give out free samples
• Simplifying your marketing plans
• Target specific customers
• Give them safety tips
• Surprise them
• Reward loyalty

22. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

The first step in branding your candle making business is to make a name for yourself. What would you like your business or your candles to be called?

• Let your name and logo be creative
• Print out business cards
• Gain industry expertise
• Patronize local papers
• Sell online
• Use keywords and hash tags to your advantage
• Join candle making Association

23. Create a Supplier/Distribution Network

Some candle makers create candles that are truly unique and so different, that they can command a higher price and sell them successfully through smaller venues.

Other candle makers are successful by creating economies of volume and distribute their candles through large distribution networks. Others find a niche and successfully create candles that may only be desired by members of that niche.

One good way to develop new store venues is to get out and visit stores that you may not normally frequent. Stop by a mall or shopping centre and see what stores have candle sections and which do not. Look for clues to success in the stores that do have candles and ask employees in stores that do not have candles, “why?”

Sometimes the answer is as simple as it was just never presented before. Some of the more obscure stores that do well are pet shops, cigar stores, bakeries, and coffee shops. Be creative with the fragrance names and try to match them to the store’s theme.

For example, the pet shop would appreciate a strong fragrance that hides pet odour while the bakery would want more food types of scents. Another suggestion is to start signing up for catalogues from mail order companies. Take particular note of the overall “feel” of the catalogue.

Design fragrances or types of candles so the finished candle compliments the catalogue. A camping catalogue would do well with nature scents such as fir or balsam, while a car parts catalogue would do well with car themed candles. Good places to find catalogues are magazines and web searches.

24. Tips for Running a Candle Making Business Successfully

Any successful business depends on filling a specific need or niche. Candles cover a variety of purposes, from practical to aesthetic. In other to run a successful candle making business, you need to consider the following details.

• Be open to change
• Listen to your customers
• Stay up to date with industry trends
• Have a business plan
• Choose a reliable niche
• Create an online presence
• Vend at craft fairs

Frequently Asked Questions