How to Start a Vinyl Business
Combining the artistic, the creative, and the meticulous, the vinyl cutting industry doesn’t only offer a fun way to exercise your creative nature, but it can even offer a valuable business opportunity. Vinyl cutting businesses may specialize in everything from automotive decals to home decor and decals and stickers. If you’re full of great ideas, like to create eye-catching designs, and are looking for a business that you can start even on a part-time business, then it might be time to start a vinyl decal business all your own.
Vinyl businesses provide cut vinyl for many different purposes. Some businesses may specialize in vinyl for car decoration, precisely cutting pieces to fit particular vehicles. Other businesses may specialize in decals that can be applied to vehicles, walls, and other surfaces. Businesses that take a crafting approach may affix cut vinyl to many different items, like water bottles, drinking glasses, and notebooks, before selling those items.
These businesses all use a vinyl cutter to cut rolls of vinyl into unique designs. While traditional vinyl cutters were manually operated, most of today’s machines are powered and work in conjunction with a computer. Customization is a major aspect in this industry, and many businesses allow customers to pick their own colors and designs and even incorporate their names into designs.
Because so many crafters have purchased vinyl cutting machines, this industry can be competitive unless you find a way to differentiate your business. Tackling larger cutting jobs that smaller crafting cutters can’t handle is one option. Specializing in a unique product or custom designs is another option. Be sure to perform plenty of market research to identify a need in the market before investing in a vinyl business.
While many businesses are run out of stores or workspaces, some vinyl business owners take to the road. Traveling trucks and trailers allow vinyl cutters to sell decals, stickers, and other goods at fairs and festivals. This can be a good way to reach new audiences and get your business in front of a large number of customers in a short period of time. While this business model requires a greater investment than other, non-mobile business models, it could be an effective way to boost a business.
According to Foam Core Print, you need to be aware of copyrights that surround designs. If you download a design and then sell the product you’ve created, you could be sued for copyright infringement because you didn’t create the original design. Selling pieces that you’ve created with trademarked or copyrighted works, like Disney characters, can also land you in legal hot water. In some cases, you can purchase a commercial license, while sometimes you can’t. It’s safest, and sometimes most appealing, to create your own designs as you may also be able to get people to pay to use your design. When you create unique designs, you can build your business’ own style and won’t have to worry about selling the same products that your competitors are creating.
According to Transparency Market Research, the vinyl cutting market encompasses residential, commercial, and industrial purposes. Businesses distribute products through both brick and mortar locations and online. This is a worldwide market, though the North American market is expected to dominate the market because of increased demand for cutters and products. The Asia Pacific and European markets are expected to follow right behind the North American market.
Many trends are influencing the vinyl cutting and decal industry. According to Sign Warehouse, the demand for adhesive-backed vinyl vehicle graphics is growing. There are plenty of opportunities in new car customization, with the recent revival of racing stripes and decals. Additionally, an increased popularity of carbon fiber vinyl accents and paint replacement with vinyl means there are plenty of vinyl cutting opportunities in the auto industry.
Eco-Friendly Crafts highlights that the craft vinyl industry is thriving, too. Vinyl has become a popular craft item, and vinyl cutting is a quickly growing niche. The emergence of Cricut and Silhouette Cameo machines has allowed crafters to pick up this hobby. At the same time, entrepreneurs can turn crafting into businesses by selling decals, wall decor, garments, and many other items made with vinyl.
While vinyl is highly popular, plastic pollution poses an environmental challenge, and the creation, use, and disposal of vinyl does emit a toxic chemical called dioxin. Eco-conscious consumers may increasingly seek out products made with eco-friendly, PVC-free vinyl, which is free of chlorine and dioxins. This vinyl is highly popular for children’s toys and other vinyl crafts, and we’re likely to see a growing market for this safer, eco-friendly vinyl.
A vinyl business’s target market will partially depend on its specialization. A business that creates vinyl decals and wraps for vehicles will market to vehicle owners with disposable income who highly value their vehicles’ appearance. A business specializing in more craft-related products may market to the general public or have a more refined target market by focusing on consumers who share a common interest, like pets, and looking for customized goods. Other potential customers include creating vinyl wall decals for interior designers, event organizers, wedding planners, or signs and vinyl stickers for local businesses.
Checklist for Starting a Vinyl Business
If you’re thinking about starting your own vinyl 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 business should be to write a clothing line 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.
Related: How to write a business plan
Step 2: Form 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 vinyl 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 that 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 vinyl company name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 4: Select your Location
It’s possible to start a smaller vinyl business out of a spare room in the home, saving on initial rent costs. As the business grows, it may be time to expand into a commercial space. Rent costs will depend on the size, location, and amenities of the space.
Related: Choosing a business location
Step 5: Register for Business Licenses and Permits
There are no specific licenses for vinyl businesses; however, there are some general business registrations that may be needed depending on the location of the business. Some of these include a business license, sales tax permit, and Employer Identification Number.
Step 6: 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 7: Get your Marketing Plan in Place
Marketing is essential not only when a business first launches but also on an ongoing basis to attract new customers. Marketing can take on many forms, including creating social media profiles on Facebook, Instagram, and Pinterest, online advertising, print advertising, and more.
If you intend to sell at craft shows, you may want to invest in business cards and flyers too.
Step 8: Get Business Insurance
There are several types of insurance to consider when starting a vinyl business. A few of these include:
– General liability insurance helps to cover expenses like medical bills or legal fees that could occur if a customer is hurt while on the business’ property.
– Commercial property insurance helps cover expenses if the business’s equipment or inventory is ever damaged or destroyed in an event like a fire.
– Worker’s compensation insurance can cover expenses like lost wages and medical bills that might result if an employee is hurt while working.
The cost to insure a vinyl business is based on factors such as the value of the business’ equipment and the number of employees on staff. To get the most accurate idea of what insurance will cost, request quotes from multiple insurance providers. When comparing the quotes, don’t just look at how the premiums compare. Instead, consider other factors, like coverage limits, exclusions, and deductibles, too.
Step 9: Hire Employees
Specific data on salary rates for vinyl cutters aren’t available, but it’s reasonable to assume that the salaries would be similar to those of cutter operators. According to PayScale, cutter operators earn an average of $16.27 per hour, though hourly rates can range from $11.03 to $23.04.
In addition to the costs of employee salaries, a business also needs to be prepared for other employee-related expenses like paid time off, health insurance contributions, and worker’s comp insurance.
Related: Hiring your first employee
Step 10: Set up an Accounting System
Setting up an accounting system 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 vinyl business?
A vinyl cutting business requires a minimum upfront investment. Depending on the model that a business needs, the vinyl cutter can be one of the largest expenses, but decent craft models also start around $300. It’s possible to start a smaller decal cutting business for $2,000.
Some common startup costs for a vinyl cutting business include:
– Cutting machine, cutting mat, blades, heat press, squeegee, Cricut maker
– Computer, printer, and graphics design software (Photoshop, Adobe Illustrator, or CorelDraw), and cutting software (Sure Cuts and Make the Cut)
– Inventory of vinyl rolls, heat transfer vinyl, t-shirts, transfer tape, and labels
How much can a vinyl business owner make?
While the information on average vinyl business incomes isn’t available, it’s important to remember that many factors can influence a business’ income. The number of years a business has been in operation, its area of specialty, its profit margins, and even the effectiveness of its marketing can all affect profits. To increase a business’s chances of bringing in higher profits, it’s important to find a way to specialize or offer a product or service that consumers can’t find elsewhere.
What skills are needed to run a vinyl shop?
Starting a vinyl business doesn’t require a business degree, but certain skills and experiences are valuable in both starting and running this type of business.
Design skills. Vinyl business owners may create designs by hand, so artistic and design skills can be valuable. They can give the business an advantage in being able to custom create designs to spec.
Aesthetic knowledge. Aesthetic knowledge is an advantage, and it will help a business owner choose designs and colors that look great and that will sell.
Math skills. Creating vinyl products can require some math and measurement skills to ensure that the cut vinyl fits appropriately.
Computer and machine knowledge. Vinyl cutters work in conjunction with computers, so knowledge of both types of systems and the ability to troubleshoot some issues will be helpful.
Awareness of current trends. By staying informed of current industry trends, a business owner can ensure that they offer the products and designs that will appeal to customers and sell well. This is particularly important when it comes to the automotive industry.
Customer service skills. Previous customer service experience and strong customer service skills can help create a positive customer experience and earn returning customers.
Attention to detail. Attention to detail is important in quality control and in ensuring that orders are filled correctly. A business owner who has excellent attention to detail can minimize mistakes and keep the cost of the wasted product down.
Are there grants to start a vinyl business?
It’s extremely rare to find a grant to start a vinyl 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 vinyl business?
The NAICS code for a vinyl business is 541430, which is categorized under Graphic Design Services.
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?