How to Start a Knife Sharpening Business
Do you have a passion for knives? Maybe you’re a collector, and you have your own knife sharpener. Why not start a knife sharpening business and use your passion to make money? It won’t cost you much to start, you can make a decent living, and you’ll be your own boss.
A knife sharpening business offers services to consumers to sharpen knives so that they don’t need to be replaced. You can do this out of a shop, your own home, or offer a mobile service. A knife sharpening business can repair knives as well and sharpen other types of blades, including lawn mower blades and scissors.
According to Grandview Research, the knife sharpening market size is $70.9 million and is expected to grow 6.5% annually through 2028. The industry is affected by the economy and its fluctuations because people buy less expensive knives during economic downturns, and those can be easily replaced for little money rather than paying the price of knife sharpening.
Consumers are buying higher-priced knives due to the popularity of cooking and cooking as a career, and those people will pay to have them sharpened rather than replace them. Businesses that use knives are also large consumers of knife sharpening services. Examples include restaurants, wood shops, and lawn mower repair services.
Your target market will be people who frequently use high-quality knives or blades in the kitchen or homeowners who need garden tools, mower blades, or chain shaws sharp. Additionally, businesses can use sharpening services such as butchers and chefs that have a recurring need to keep their blades sharp or sharpening shears and clippers for barbershops and salons.
Skills, Experience, and Education Useful in Running a Knife Sharpening Business
There are several specific skills that you will need to open a knife sharpening business.
- Experience. Experience is critical in a knife sharpening business. You need to have the right skills to do quality work.
- Attention to detail. Knife sharpening requires precision. If you make a mistake and ruin a knife, you will probably have to replace it for the customer.
- Knife sharpening education. There are knife sharpening courses that you can take, which will help you if you don’t have much experience.
- Business knowledge and experience. You will need to have some basic knowledge of marketing, finance/accounting, and human resources.
- Customer service. You’ll need to be able to build rapport with your customers so that you retain them as customers and gain repeat business and referrals.
Checklist for Starting a Knife Sharpening Business
If you’re thinking about starting your own knife sharpening business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your knife sharpening 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 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: Select a Business Entity
A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures 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 knife sharpening 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 to minimize liability risk 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: Guide 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 3: Name the Business
Finding the perfect knife sharpening business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but 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 4: Select your Location
You can just run your knife sharpening business from your home to save costs, but if you choose to have a shop, it should be in a convenient location for a lot of potential customers.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
There are no specific licenses needed for a knife sharpening business, however, there are common local, state, and federal registrations that may be needed, such as 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 knife sharpening business is another. Fortunately, the cost to start a knife sharpening business is pretty low, however, if a loan is needed, 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 small 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
Marketing and acquiring clients will be your biggest challenge and an ongoing expense. It will take some time to get enough clients to cover your marketing costs, and many start in this business as a side hustle until they get enough customers to leave their day job. You’ll need to be creative to get customers by marketing to restaurants and other businesses that use blades. To get in front of this market, one approach could be through renting booth space at various events such as farmer’s markets and food fairs to advertise. Your services are necessary, but people have to know about you.
To stay ahead of competitors, a budget will be needed to cover marketing costs on a continuous basis. Common marketing techniques for a knife sharpening business include social media marketing and online advertising.
Developing a website can be a significant expense, but it can also give your knife sharpening business greater visibility online. You can also rent booths at flea markets or gun and knife shows or drop off flyers at local hardware stores for a minimal cost to market your services.
Last, doing quality work will be the greatest source of new customers. This takes time to build, but referrals and repeat business are what will help you to grow your company, so customers need to be happy with the end result.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a knife sharpening business. A couple of these include:
– General liability insurance can help protect you from third-party claims of bodily injury and property damage.
– 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 to insure a knife sharpening business will vary depending on several 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 choose to hire employees to help you run your knife sharpening business, particularly if you build a large customer base. If your business grows large enough to need employees, you’ll also need extra tools and equipment.
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 knife sharpening 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 knife sharpening business?
Here are the typical costs you will face when you open a knife sharpening business. If you run your business from your home, which is probably your best bet, your expenses will be minimal.
– Setting up a business name and corporation costs approximately $200.
– Business cards, brochures, postcards for marketing $200 – $300
– Website setup $100 –$200 for a basic, do it yourself website, $1,000 – $2,000 for a professional site
– Knife sharpening equipment such as stropping belts, belt sander, paper wheels, sharpening machines,multi-grit stones, honing compounds, safety glasses, etc. $1,000 +
– A vehicle for a mobile service $10,000 +
– Shop space $500 – $1,000 per month
– Liability insurance, worker’s comp, property-casualty insurance $600 – $1,000
– Initial marketing such as Facebook ads or search engine optimization for your website, flyers, and postcards, $500 -$1,000
How much can a knife sharpening business owner make?
Prices for knife sharpening are about $5 – $7. If you are able to build up a large number of customers and sharpen 200 knives per week at $5, you will make $1,000 a week or $52,000 per year.
Are there grants to start a knife sharpening business?
It’s extremely rare to find a grant to start a knife sharpening 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 knife sharpening business?
The NAICS code for a knife sharpening business is 811490, which is classified under Other Personal and Household Goods Repair.
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.
Related: What is a NAICS code?