How to Start a Candle Making Business

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Candles add beauty and wonderful smells to homes; they’re ideal for enhancing an environment and make great gifts. If you love candles and are crafty, then you may have even tried making them in the past. But have you considered that you could turn this hobby into a business? Candlemakers have the opportunity to bring their ideas to life, using their creativity to come up with something new and exciting that others will want in their homes. Best of all, you can start a small candle making business right out of your home, saving money on expenses like rent and allowing you to grow the business gradually. Think candle making might be the business opportunity for you? Read on to find out just what’s involved with this venture.

Business Overview

Candle making businesses usually specialize in creating particular types of candles. Some may create jar candles, while others may make specialty candles that are inspired by certain scents or places. Candle businesses may focus on hand-made candles out of materials such as beeswax, soy wax, paraffin, or gel. At the same time, larger operations often make candles in big batches, using machinery to keep up with the high volume.

These businesses are run in many different ways. Smaller operations can be run out of a home kitchen, with business owners selling at a booth at craft shows and flea markets. Some business owners open actual storefronts or shops, some sell through boutiques and gift shops, while others sell online through their own website or Etsy. There are many different business models in this industry, which means business owners can choose to run their businesses in the ways that best complement their lifestyle and business goals.

Industry Summary

According to IBIS World, the candle manufacturing industry experienced a 1.5 percent annual decline from 2014 to 2019. In 2019, the industry was predicted to bring in $2 billion in revenue. From 2014 to 2019, the number of businesses grew to 462, while industry employment declined to 5,116. Newell Brands, Inc. currently holds the largest market share in the industry.

While the industry declined during that five-year period, it is expected to benefit from increased demand for candles in the coming years. Continued growth in per capita disposable income may mean that more people choose to purchase candles. Lower-priced imported candles will continue to be competition for USA-based manufacturers, meaning that manufacturers may have to get resourceful and find ways to create unique candles or higher quality candles to help drive sales.

Industry Trends

The candle making industry is constantly affected by changing and new trends. According to Candlewic, fragrances, colors, jar types, and even wax formulations are all affected by trends. Sometimes, these trends evolve together – for instance, fragrances and colors are often closely linked. It’s important for candle makers to be aware of trends and quickly adapt to customer’s desires. Sometimes, taking inspiration from trends and then finding a way to do things differently can pay off in increased sales.

The Wooden Wick Co. reports on some trends that all candle makers should be aware of and embrace. An increased focus on sustainability is influencing all industries, including candle making. Candlemakers can embrace this trend by re-using wicks, repurposing jars, and sourcing sustainably farmed wicks and materials.

Consumers are also placing increased importance on experiences. Consumers may use candles to create experiences in their homes, carefully choosing candles for their colors, the light they give off, and their scents. Using wooden wicks can further enhance this experience since these wicks crackle as they burn.

Candle trends are sure to continue to evolve, and many of them emerge on Pinterest before they hit the stores. Candlemakers can use social media to stay aware of the new trends they may want to incorporate into their business.

Target Market

Candle making businesses will develop different target markets depending on how they shape their businesses. A business specializing in premium candles might market to gift-givers and homeowners looking for that perfect candle to elevate a home space. Manufacturers who craft candles designed to reflect the scents and scenes of a particular location will market to tourists and homeowners in that specific location.

Skills, experience, and education useful in running a candlemaking business

Starting a candle making business doesn’t require a business degree. Certain skills and experiences will make it easier, though, and improve the business’ chance of success.

Candle making experience. Some previous candle making experience will be helpful. If a business owner doesn’t have firsthand experience, then an apprenticeship under an experienced candle maker can help with skill and knowledge development.

Creativity. One of the challenges in this industry is designing products that will stand out from currently available candles. Creativity is a valuable skill to have.

Attention to detail. A business owner’s attention to detail is important in providing quality control and ensuring that candles represent the business well.

Interpersonal skills. Whether building relationships with customers or with retailers, a candle maker will benefit from strong interpersonal skills.

Costs to Start a Candle Making Business

One of the benefits of getting into the candle making industry is that candle makers can start businesses on a small scale, growing them gradually. Small-scale businesses started out of the home have relatively minimal startup costs. Plan to spend about $1,000 on a small business run from your home, while a larger-scale business can cost $10,000 or more.

Common startup costs for a candle making business include:

  • Equipment, like pouring pots and jars
  • Initial inventory and supplies, like wax, wicks, jars, molds, dyes, fragrance oils, thermometer, scale, etc.
  • Labels
  • Website
  • Signage (for brick-and-mortar businesses)

Steps to Starting a Candle Making Business

Step 1: Write a Business Plan

After coming up with the idea, the next step in starting your business should be to write a business plan.  Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

How to write a business plan
Free sample business plans

Step 2: Select a Business Entity

A business entity, sometimes called a business structure or legal entity refers to how a business is legally organized to operate. There are four primary business entities to choose from: sole proprietorship, partnership, corporation, and Limited Liability Company.  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

Related: Comparison of Business Entities

Step 3: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, it also has to be available to use.

Related: Tips & Ideas for Naming a Candle Business

Step 4: Select your Location

While a smaller business can be run out of a home’s kitchen, it may be necessary to move into a larger space or maybe even a small storefront as that business grows. Rental costs for these spaces will vary depending on the size of the space, whether it’s a retail or manufacturing space, and even where that space is located. A prime retail location will carry a higher rent cost, but it can result in valuable walk-in business and increased public awareness.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

There are no specific licenses for a candle-making business; however, there are general business registrations at the local, state, and federal level that a candle-making business might need, such as a sales tax permitEmployer Identification Number, and Occupancy Permit, among others.

Related: Common business licenses, permits, and registrations by state

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 candle making business is another.  While the cost to start a candle making business is low, getting a loan can be difficult as most of the money would go towards inventory and marketing costs.  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.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A strong, comprehensive marketing plan can contribute to a business’ success. Many candle makers create websites and maintain active on various social media platforms like Facebook, Instagram, and Pinterest. Paid online advertising and paid social media ads may also be valuable strategies. Business owners who do some or all of their marketing themselves can save on the cost of hiring a professional marketer, stretching their budgets in the process. Marketing costs will vary depending on the type of marketing being performed.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

Candle making businesses need several types of insurance to be fully covered:

  • General liability insurance protects the business if a customer is ever injured while on the business’ property, like a trip or a fall. This insurance can cover costs like legal fees and expenses.
  • Commercial property insurance protects the business against the loss of property and supplies after an event, like a fire (which is important as you are working with flammable materials).  If you are operating the business out of your home, you may review your policy to see if it covers accidents that resulted from the business.
  • Worker’s compensation insurance helps to cover expenses like medical bills or lost wages if an employee is ever hurt while on the job.

Many factors can affect insurance policy costs, including the value of the business’ equipment and the number of employees on staff. To get the best idea of what insurance will cost, request quotes from multiple providers and compare them. Be sure to look at factors like each policy’s coverage limits and exclusions, premiums, and deductibles.

Step 10: Hire Employees

A business owner can handle all of their initial candle production, but it may be time to hire help as the business grows. Neuvoo reports that candle makers earn an average salary of $24.863 per year or $12.75 per hour. Entry-level candle makers earn a bit less at $22,425 per year, while more experienced candle makers can earn as much as $33,826 per year.

Salaries are just one expense that comes with hiring employees, though. A business also needs to budget for workman’s comp insurance, paid time off, and health insurance contributions.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your candle 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.

Related: Setting up accounting for your business


How much can you potentially make owning a candle making business?

A candle-making business’s profits will depend on that business’s size, the number of employees, any specialty areas that the business focuses on, and even how the business sells candles, like selling wholesale or retailing candles directly to customers.

Since the average price of candles can range from a couple of dollars to $20, it’s important to have several suppliers where you can watch their prices and take advantage of discounts to make the most profits.  Also, keep in mind that a business that creates unique types of products that nobody else has or fills an unmet need in the marketplace can enjoy more success by charging higher prices.

Things to consider before starting a candle making business

While creativity and an artistic mind are great traits to have as a candle entrepreneur, it’s also important to turn on your brain’s analytic side when assessing your business’ finances. This can be a transition that surprises some new business owners, but having detailed, accurate financial data is essential to your business’ success. From pricing out supplies to pricing your products so that you make an appropriate profit, get involved in your finances from the beginning, and make sure that you understand how your business financially operates. If you need help, consult an accountant or bookkeeper; these professionals can help you get set up correctly, saving you time (and possibly money) at tax time.

Starting a candle making business is a journey, so don’t expect overnight success. Plan to experiment with different designs and scents and different marketing and retail options until you find something that works for you. Most importantly, focus on creating a brand and products that are easily recognizable and stand out as unique from other candle makers.


National Candle Association

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