How to Start a Phone Case Business
Think of all the people that have smartphones now. In the United States, it’s over 294 million! One one thing many smartphone users purchase are protective cases to keep their phones safe – and they often want unique design. Starting a phone case business could be a great opportunity for you to be your own boss and make some money.
A phone case business sells phones of various designs, sometimes custom designs. 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.
According to Statista, the mobile phone accessories market was $28.53 billion in 2018 and is expected to grow to $74.43 billion by 2026. According to Grandview Research, the phone case sector of this market was $21.4 billion in 2018 and is expected to be $35.5 billion in 2025.
Because mobile devices are considered an essential part of daily life, and phone cases are necessary to protect them, the phone case market is not significantly impacted by economic fluctuations. The industry is expected to grow as smartphone use, and phone upgrades continue to grow.
Your target market will be people with smartphones, particularly younger demographics who are interested in custom designs.
Skills, Experience, and Education Useful in Running a Phone Case Business
There are several specific skills that you will need to open a phone case business.
- Online Sales Knowledge and SEO. Since you will probably be selling online, you need to know how online sales channels work and how to get traffic to your site.
- Experience. You will need some practice making phone cases unless you decide to partner with a manufacturer to make your cases.
- 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 Phone Case Business
If you’re thinking about starting your own phone case 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 custom phone case 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: Name the Business
Finding the perfect phone case 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 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 phone case 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 4: Select your Location
Many phone case stores will sell their cases through an online store or online marketplaces like Amazon, Etsy, or eBay. Others will rent a kiosk in a mall or other heavily trafficked area.
Related: Choosing a business location
Step 5: Apply for 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 a phone case business may need, which include a sales tax permit and an Employer Identification Number.
Step 6: Find Financing
Most cell phone case businesses are able to start without any outside funding, 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
There are a lot of competitors in the phone case market, so it may be hard to go up against established competitors like Otterbox. However, if you can find a specialty niche that others aren’t as focused on, you may find a loyal audience.
A phone case business will need to set aside a budget to cover marketing costs on a continuous basis. Some common marketing techniques for a phone case business include social media marketing on platforms like Facebook, Instagram, and Pinterest or digital advertising. Developing a website can be a significant expense, but it is necessary to have a professionally designed website to sell your cases.
One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a phone case business. A few 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 phone case 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
Many phone case businesses are operated by just the owner, but if you want to grow to a larger scale, you may need employees to help you run the business.
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 phone case 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 phone case business?
Here are some of the typical costs you will face when you open a phone case business.
– Phone case-making kit $3,500
– Initial inventory of materials $1,000-$2,000
To save on startup costs, you can work with a distributor to print-on-demand, which will allow you to only produce inventory when a customer orders. Buying this way is going to be more expensive per case than ordering bulk, but it may be a great way to start without spending a lot of money.
Is a phone case business profitable?
Phone cases have high-profit margins, particularly custom cases. If you sell custom cases for $60 and you sell 20 per day, you could make $438,000 in revenue per year before expenses.
Partnering with a manufacturer is an option to help produce higher volumes without hiring and managing employees. You will be able to fulfill a much higher volume of sales if you do, reducing rather than just making them at home with your own machine. The downside is the profit margin for each case will be lower.
Are there grants to start a phone case business?
It’s extremely rare to find a grant to start a phone case 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 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?