Think of all the people who have smartphones now. In the United States, it’s over 307 million! And one thing many smartphone users purchase are protective cases to keep their phones safe – and they often want a unique design.
With new models and designs being introduced often, there has never been a better time to start your own cell phone case business. But hold on, having a cool design idea isn’t enough. You need to be prepared for the hurdles that come with entrepreneurship, and this guide is here to help you navigate the key steps to getting started.
A custom phone case business involves designing, manufacturing, and selling cases for mobile phones. Cases may be designed for decoration or extra protection and include cases made of materials like plastic, silicone, leather, and wood.
Most phone case businesses sell online, but some sell in a retail setting, such as a kiosk in a mall. Some custom case businesses make their own cases, while others will focus on dropshipping cases made by other manufacturers.
Another consideration is whether you will focus on making cases for a particular model like the iPhone or Samsung Galaxy, or both. Each time a new device is released, retooling for the new phone case design will be necessary.
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The phone case industry has grown steadily along with the mobile phone market. As new phone models are released, there is an ongoing need for new case designs. Consumers also purchase cases as fashion accessories and to showcase their personal style.
The global phone case market was estimated at $22 billion in revenues during 2022. This market is not just huge; it’s growing. The rapid pace of smartphone adoption worldwide and the need to protect these devices contribute to this growth and is projected to increase by 8.3% annually through 2030.
Steps To Start A Phone Case Business
Step 1: Market Research
Starting a phone case business, like any other venture, requires careful planning and research. This involves gathering information about the market, potential customers, and who is already operating in the phone case industry.
The aim is to understand the demand for your products, identify your target audience, and recognize what makes your business unique. While big players like Otterbox have the general market cornered, they can’t be everything to everyone. That’s where a smaller, more focused business can really shine.
When doing market research, you want to hone in on your ideal target audience. Say you decide to create phone cases featuring artwork from local artists. Not only does this tap into community spirit, but it also offers something unique that larger companies aren’t doing. Or perhaps you focus on making ultra-durable cases specifically for outdoor adventurers, with added features like a built-in compass or firestarter. These are the kinds of specialized products that can earn you a dedicated customer base.
Identifying a niche is more than just a business strategy; it’s a survival tactic. A well-chosen niche can give your brand a distinct personality and a purpose that resonates deeply with a specific group of consumers. It can be the difference between getting lost in the sea of generic phone cases and building a brand that people genuinely care about.
And let’s not overlook the power of word-of-mouth in niche markets. People love to share their “hidden gem” finds with friends and family. So, once you’ve impressed a small group of dedicated customers, you may find your business growing faster than you’d imagined.
Step 2: Write a Business Plan
Writing a business plan is the next step in starting a business, and while it isn’t required unless you need funding, it’s still important to have. It’s essentially a roadmap that outlines your business goals and how you plan to achieve them. A business plan also serves as a reality check, forcing you to consider all aspects of your business, from market analysis and management to financial projections.
Related: How to write a business plan
Step 3: Secure Funding
You’ve got your business plan, and you’re confident there’s a market for your unique phone cases. Now comes a major hurdle for many entrepreneurs, which is funding. Capital is the lifeblood of any startup, and in the competitive phone case market, you’ll need a fair amount to get off the ground. So, how do you secure the funds you need? Let’s look into some common sources.
Personal savings: The first funding source to look at is your personal savings. Cell phone case businesses can be very affordable to start, and many entrepreneurs don’t have to rely on outside funding. But, if your savings aren’t enough, you’ll need to explore additional options.
Traditional lenders: For additional funding, banks and credit unions offer small business loans. To qualify, you’ll likely need good credit, collateral, and to invest a portion of your own capital, as lenders want to see you sharing the risk. If the loan seems too risky for a bank loan, the Small Business Administration (SBA) can guarantee a portion of qualified loans to encourage lending.
Friends and family: Asking friends or family to invest in your business is another option. Be sure to put any agreements in writing to avoid misunderstandings. Set clear repayment terms and offer interest.
Microloans: For those with limited funding needs or who can’t secure traditional loans, microloans are a viable option. Microloans are small, short-term loans with lower qualification requirements. Some organizations even offer business training alongside the loan, which can be a valuable bonus.
Step 4: Register the Business
Starting a phone case business involves several steps to ensure it’s properly registered and legal. Navigating through the legal requirements might seem overwhelming, but it’s a necessary part of the entrepreneurial process. Keep in mind that rules can vary by state, so always check local regulations.
Choose a business structure: The first step is to decide on your business structure.
There are four types – sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC). Each has its own advantages and disadvantages. For instance, a sole proprietorship is easy to start up and has lower costs, making it a popular choice for small businesses. However, it doesn’t offer personal liability protection. On the other hand, an LLC or corporation does provide liability protection but involves more paperwork and higher setup costs. The choice of structure will depend on your specific circumstances and goals.
Related: Comparison of business structures
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!
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Obtain business licenses and permits: While there are no licenses and permits specifically for a cell phone case business, there are some common local, state, and federal registrations many businesses, which include a sales tax permit and an Employer Identification Number.
Step 5: Select Suppliers
If you’re setting up a phone case business, finding a good supplier is key. An important factor to consider when finding suppliers for your phone case business is whether you want to use the dropshipping or in-house production model.
Dropshipping involves outsourcing the production and shipping of your products while in-house production requires you to manufacture the products yourself. If you prefer the dropshipping model, make sure to find a reliable supplier that offers this service. If you want to produce the cases in-house, you will need to find suppliers that can provide you with raw materials such as plastic or silicone.
Step 6: Set Up Operations
Starting a phone case business involves several steps, each critical to its success. After clearing the initial legal hurdles, like choosing a business structure and registering your name, the focus shifts to operational aspects.
Setting up a workspace is likely your first move. This could be a home office, a co-working space, or a small manufacturing facility, depending on the scale of your operations. Ensure that the workspace is equipped with all the necessary tools and equipment for making phone cases.
Next, consider how you will sell your products. Local sales can be a good starting point. Consider reaching out to local stores and seeing if they’d be interested in stocking your cases. Online sales, however, offer a broader customer base. Setting up your own website can give you more control over your brand, but it also requires more work in terms of setup and maintenance. Alternatively, you can use online marketplaces like Etsy or Amazon, which are user-friendly and come with a ready-made audience.
Step 7: Prepare to Launch!
After registering your business and establishing your supply chain, there are still several key steps you’ll need to take before launching your phone case business. Every business will have different needs, but here are some common items:
Business insurance: Protect your business from potential risks with business insurance. This could include general liability insurance or product liability insurance, which can cover claims related to the use of your phone cases.
Business bank account: Open a separate bank account for your business to keep your personal and business finances separate. This will make it easier to track your income and expenses.
Marketing strategy: Create a comprehensive marketing strategy to attract customers. This may include designing a logo, setting up a website, using social media, email marketing, search engine optimization (SEO), and more.
Common Questions When Starting A Phone Case Business
How much does it cost to start a phone case business?
Starting a phone case business can cost between $2,000 to $30,000 when all initial expenses are included. Some of the main costs involved in launching a phone case startup include:
Registering your business: $100
Equipment: If you’re manufacturing your phone cases, the cost of equipment such as 3D printers or injection molds can range between $1,000 to $10,000.
Initial inventory purchases: $500 – $3,000 for the first sample batch
Packaging materials: $500 – $1,500
Printer fees for custom case designs: $300 – $1,000
Website design: $300 – $5,000
Marketing: $500 – $1,000
Is a phone case business profitable?
A phone case business has the potential to generate sizable profits due to the high margins and demand in this market, but the profitability can vary widely based on factors like location, business model, and overhead costs.
To give you a basic idea, let’s say you sell 100 phone cases a week at an average selling price of $15. Your weekly revenue would be $1,500. In this model, if your cost for each case is $5, your total weekly expenses on inventory would be $500, not counting other operational expenses like merchant processing, website maintenance, marketing, and insurance, which we’ll assume adds up to another $200 per week.
So, in our example:
Weekly Revenue: 100 cases x $15 = $1,500
Weekly Inventory Expense: 100 cases x $5 = $500
Weekly Other Operational Expenses: $200
Weekly Total Expenses: $500 (Inventory) + $200 (Operational) = $700
Your weekly profit in this scenario would then be $1,500 (Revenue) – $700 (Total Expenses) = $800. This equates to a monthly profit of about $3,200 and an annual profit of around $38,400. These are rough estimates, but they give you a basic formula for calculating your potential profit in the phone case business.
What skills are helpful in running a phone case business?
Running a successful phone case business requires a unique blend of skills. Here are some of the most important ones based on my search:
Artistic and design skills: A significant part of a phone case business revolves around creating appealing and unique designs. Therefore, having artistic abilities or a keen eye for design can be extremely beneficial.
Business management skills: These skills are crucial for running any business. They include financial management, strategic planning, and operational efficiency.
Marketing and branding skills: Whether you run an online shop or a physical store, you need to market your products effectively and build a strong brand presence. This involves understanding SEO, social media marketing, and possibly even influencer marketing.
Sales skills: You should know how to sell your product and negotiate with suppliers or potential business partners. This includes understanding your target market and knowing how to appeal to them.
Research skills: To stay competitive, you need to keep up with industry trends and customer preferences. This involves regularly conducting market research and competitor analysis.
Customer service skills: Excellent customer service can set your business apart from competitors. This includes responding promptly to customer inquiries, resolving issues effectively, and ensuring overall customer satisfaction.
What is the NAICS code for a phone case business?
The NAICS code for a phone case business is 311811.
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?