How to Start a 3D Printing Business
3D printing is a growing industry. Whether you have experience with 3D printing rapid prototyping, a 3D printing business could be an opportunity for you to cash in on a 3D market that is booming. You could start your business for a relatively low cost and make a living as your own boss.
3D Printing Industry Overview
A 3D printing business (also referred to as additive manufacturing) creates physical prints of 3D images to make product prototypes that will be later used for injection molding, toys, custom prosthetics, jewelry, gifts, promotional products, and more. Different materials such as plastic and metals can be used.
According to Statista, the global 3D printing industry was $12.6 billion in 2020 and is projected to grow 17% annually through 2023 and reach $37.2 billion by 2028.
Prototyping is the largest segment of the industry for industries such as healthcare, automotive, aerospace, and defense. Prototyping using 3D printing technologies for manufacturers reduces their production costs.
Your target market will depend on what type of printing you plan to specialize in. If you decide to specialize in prototyping, since you are starting small, you could target entrepreneurs who are in the prototype stage or small businesses.
Skills, Experience, and Education Useful in Running a 3D Printing Business
There are several specific skills that you will need to open a 3D printing business.
- Experience. Experience doing 3D printing is valuable.
- Education. You will need to educate yourself about the materials, software, and processes involved.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Checklist for Starting a 3D Printing Business
If you’re thinking about starting a 3D printing business, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your 3D printing business should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be, and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business, and then serves as a guide as you begin.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect 3D printing business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a 3D printing business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: 3 steps to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
Some 3D printing companies meet with clients at their office, however, many operate from their home. If operating from your home, be sure to check with your local unit of government to determine whether a home occupancy permit is required.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located. Check with your state for specific license and permit requirements for your 3D printing business. Some other common local, state, and federal registrations a 3D printing business may need include a sales tax permit and an Employer Identification Number.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing but getting the funding to start a 3D printing business is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
A 3D printing business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a 3D printing business include social media platforms like Facebook, Pinterest, and Instagram, along with online advertising.
A website is a must, but depending on the products you are creating, listing your products on marketplaces such as Etsy, Amazon, and eBay may be excellent places to get more people to notice your items.
If you are creating Your biggest source of business will be from making direct calls to businesses if you choose prototyping or promotional products. You could also contact local business incubators to reach entrepreneurs.
Step 9: Get Business Insurance
A 3D printing business will want to consider several types of insurance to protect the business. Some common types of insurance for a 3D printing business include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
The cost for insurance policies will vary due to a number of factors. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hire Employees
You may need employees to help you run your 3D printing business. Make sure that you select people with appropriate experience and training.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your 3D printing business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a 3D printing business?
The cost will vary greatly, depending on the niche you plan to go into. The equipment needed to print prototypes for manufacturers is going to be very different from smaller novelty items.
That said, here are some typical costs when starting a 3D printing business.
– 3D printer – $1,000-$50,000
– 3D scanner – $200-$10,000
– 3D printing material – $250-$5,000
– Design software – $0-$5,000
– Desktop or laptop computer – $1,500-$5,000
– Replacement parts like nozzles, build plates, filament etc. – $100-$500
– Materials such as filaments $500-$1500
If the cost of equipment is too high, you could start off providing 3D model design services and then send the file to a printing service. This is a lower-risk way to get started to see if you can get customers and like this business.
How profitable is a 3D printing business?
The prices you charge will vary depending on the complexity of what you are producing. There is no limit to how much you can make if you are successful.
Are there grants to start a 3D printing business?
It’s extremely rare to find a grant to start a 3D printing business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a 3D printing business?
The NAICS code for a 3D printing service is 323111, which is categorized under Commercial Printing.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.